In 1992, federal Liberals condemned the Conservative
government for cancelling the federal co-operative housing
program:

"The Mulroney government has also cut co-op housing
and this cut will greatly affect single parents, the
handicapped and some of the less affluent Canadians who
are able to live in these co-op housing units with some
degree of comfort."

Diane Marleau, Sudbury
MP, March 31, 1992

"Canadas first co-operative housing program
was introduced in 1973 under a Liberal government - and
our party has remained committed ever since. Like you, we
were dismayed by its elimination. . . Liberals have
called for the restoration of this important federal
program."

Hon. Jean Chrétien, April 24,
1992

In 1993, in the lead up to the last federal election,
the Liberals promised:

"We intend to build new partnerships with your
groups to achieve our goal of providing shelter for all
Canadians."

Paul Martin, Sept. 22,
1993

"A Liberal government will remain a partner of
the co-op sector and non-profit orgnaizations in
subsidized housing by providing the means required to
allow them to play their role fully."

In a major pre-election policy in 1993, "A
Liberal approach to federal housing issues," the then
Liberal Housing Critic Joe Fontana (now the Chair of the
national Liberal Caucus) promised on behalf of the Liberal Party:

"One of the key elements to a Liberal housing policy
is the re-institution of the federal co-operative housing
program."

By 1996, Finance Minister Paul Martin stated in the
federal budget that "the issue of the role for third parties
in the administration of the social housing stock will be
discussed with the provinces and territories". Contrary to
that commitment the federal government has told the provinces
that they must take over all federal housing programs or none - a
position that effectively precludes any consideration of the
co-op sectors alternative.

Provinces get
"freedom" to close down much-needed housing

(April 4, 1997)

"These new arrangements will allow provinces and
territories the flexibility to meet the needs of their residents
and generate savings to reinvest in social housing while adhering
to national principles and an accountability framework,"
said Diane Marleau, federal minister responsible for
Canada Mortgage and Housing Corporation, April 1st as she signed
an agreement to hand over federal co-op and social housing to New
Brunswick. But the Ministers "flexibility" will
have serious consequences for the long-term legal contracts under
which co-ops operate. In a legal opinion for CHF Canada based on
a federal-provincial agreement signed in early March with Saskatchewan, noted
constitutional scholar Patrick Monahan warned that nothing
in the agreement prevents the province from changing the terms of
the existing contracts.

"The provinces have a new freedom to remodel co-op
housing programs, " says Barbara Millsap, CHF Canada
President. "The new federal-provincial agreement allows the
provincial government to continue to receive federal housing
dollars for a social housing project even if that project fails,
or is closed down by the province. The province will continue to
receive federal rent supplement dollars, even if the rent
supplement program is ended. The province will continue to
receive federal public housing dollars, even if those units are
sold. The province has no obligation at all under the new
agreement to put in any provincial money on housing. The province
can substitute the federal funds saved for its own
housing funds." Under the agreement, the federal government
isnt covering all the costs of running the new provincial
bureaucracies. "The Saskatchewan deal, far from meeting the
housing needs of lower-income people, gives an incentive to the
province to shut down existing social housing programs. The
so-called national principles and accountability framework in the
agreement wont stop this."

The federal-provincial housing transfer follows a pattern set
by Ottawa in other areas of social spending, including health
care, education and welfare. Ottawa is moving out of shared-cost
programs, which provide some long-term certainty by locking in
federal and provincial dollars and program commitments. It is
downloading financial responsibility to the provinces and in
return giving them more flexibility to make spending
cuts. "This change in financing arrangements for social
programs has led to hospital closings, welfare cuts and a squeeze
on school. Co-op housing is next," says Millsap. "The
federal government is ducking its responsibilities. The provinces
will be forced to preside over the inevitable erosion of a
successful national program that has delivered good quality,
affordable housing for three decades."

Federal Liberal caucus growing uneasy
as government moves ahead with social housing transfer to
provinces

(April 4, 1997)

A growing number of Liberal politicians across the country are
speaking out on their own governments plan to hand over
federal co-op housing programs to provincial and territorial
governments. For months, Diane Marleau, federal minister
responsible for housing, has promised that existing long-term
legal agreements between co-ops and the federal government will
be protected in any housing transfer deal. Liberal MPs have been
repeating that promise in meeting after meeting with concerned
co-op members across the country.

Noted constitutional scholar Patrick Monahan has just
reviewed the agreement signed between the federal government and Saskatchewan on March 4th and
warns that co-ops legal agreements are not protected under
the transfer scheme. Marleau has said that the agreement with
Saskatchewan will serve as the model for deals with the other
provinces and territories. An agreement with New Brunswick was
signed on April 2ndand others may follow soon.

"Co-op housing members are deeply worried," said Barbara
Millsap, President of the Co-operative Housing Federation of
Canada, at a press conference in Ottawa today. "This is not
just an administrative move," added Millsap. "Moving
from one federal agency to twelve provincial and territorial
agencies wont lead to streamlined administration of co-op
housing and is already leading to the demise of individual co-op
developments in some provinces. Federal officials risk destroying
a successful program that has created good quality, affordable
housing and knitted together communities across Canada. This is
an example of the governments hamfisted approach to tackle
the national unity problem."

"Jean Chrétien, Diane Marleau and other
Liberals condemned Brian Mulroney in 1992 when he killed
the development of new co-ops," noted Millsap. "Co-op
housing members from coast-to-coast feel betrayed and are angry
that their concerns are ignored." In the lead-up to the last
election, Paul Martin and the Liberals pledged to work in
partnership with co-ops to develop affordable housing. When he
announced in the 1996 federal budget that CMHC would phase out
its role in social housing, Martin pledged that a possible role
for third parties in the administration of the existing stock
would be discussed with the provinces. In response, the co-op
housing sector tabled a detailed plan to create a
non-governmental facility to take on the administration of the
co-op portfolio. Co-ops across the country have endorsed the
co-op plan - along with a large number of Liberal MPs. But Ottawa
has told the provinces that they must take over all federal
housing programs or none - a position that precludes
consideration of the co-op alternative.

For more information: Alexandra Wilson - (613)
230-2201, ext. 236

Liberal
cabinet ministers, MPs and senators urge their own minister to
slow down housing transfer

(April 4, 1997)

Dozens of Liberal MPs and senators across Canada, including
cabinet ministers, are distancing themselves from their own
governments plan to hand over the federal co-op housing
program to the provinces and territories. Members of the
government are also pledging their support for the co-op housing
sectors plan to take on administration of the co-op
programs.

"I will tell you that come hell or high water,
Im not about to transfer one darn co-op housing
unit. . . to Mikey [Ontario Premier Mike Harris] so he
can turn around and give it to the municipal taxpayer or
anyone else. It just aint gonna happen."

Joe Fontana, MP for
London Centre, London Free Press, Feb. 1, 1997

"CHFs experience, knowledge, and
resources in the field of co-ops would make them
effective in administering the social housing
stock."

George Proud, MP for
Hillsborough (P.E.I.), letter, May 16, 1996

"I urge you to revisit [the CHF Canada] proposal
and to seriously consider this as an alternative to the
transfer of co-operative housing to the provinces.
Co-operatives have been very effectively administered in
the past and I see this proposal as the best
alternative."

Mac Harb, MP for
Ottawa Centre, letter to Diane Marleau, Feb. 6,
1997

". . . how will the interests of the CHF
and co-operatives in general be protected after the
transfer of administration of social housing to the
provinces. . . when will the individual housing
co-operatives be consulted in a meaningful way. . ."

In an unprecedented action, the Greater Toronto Area
Federal Liberal Caucus, which includes 33 MPs and seven senators
(including cabinet ministers such as Art Eggleton, Doug Peters
and Allan Rock) issued a press release on Feb. 21st, 1997, urging
their own minister to "move cautiously" on the plan to
transfer federal co-ops to the provincial government in Ontario.

Still
plenty to be concerned about . . .

Marleau
says, dont worry about social housing transfer

(CHF Ontario Region Action Bulletin: May 8, 1997)

On April 25, Diane Marleau, the federal housing minister,
wrote to co-ops. Her letter attempts to address some of the
concerns co-op members have raised about the federal plan to
transfer administration of co-op and social housing programs to
the Ontario government. Her letter raises a number of
issues.

The Minister says "the federal government has no
intention of putting social housing at risk." She
says that after the transfer, provinces will have to
honour co-op contracts. She says that the federal
accountability framework and principles set out in the
transfer deal will protect co-ops in Ontario.

The problem is that the federal accountability framework and
principles in the transfer deals signed with other provinces are
too weak. They simply do not provide real protection for
co-ops or their members.

Professor Patrick Monahan, one of Canadas leading
constitutional lawyers, reviewed the transfer agreement and
concluded that provinces are not required to respect existing
co-op contracts and can, without the consent of co-ops, amend or
replace co-op contracts.

The Minister also claims that the federal government
doesnt know enough about the Ontario
governments plans to download social housing, so
she cant decide whether the Harris scheme is
acceptable to Ottawa. She says this is because Ontario
has not responded to her February 11 letter.

What more information does the federal government need? Ontario has made no secret about
its plans. It wants "to get out of the housing
business" and plans to do so by downloading housing onto
municipalities. Co-ops, municipalities and the rest of the
non-profit housing community are all clearly against downloading.

The federal government and CMHC knew about Ontarios
downloading plan well before the January 14 announcement from
Queens Park. According to Ontario officials, the federal
government expressed no concern with the plan even though
Ontarios downloading announcement openly mentions the
possibility of selling off social housing units.

In her February 11 letter to Ontario Housing Minister Al
Leach, Marleau says she is "pleased that you wish to
continue our bilateral negotiations." Ontario has prepared
its formal response to Marleaus letter, but provincial
officials say that the federal government has said that it
prefers not to hear from Ontario until after the federal
election.

Minister Marleau closes her letter by again claiming
the transfer deals signed so far oblige provinces and
territories to respect the rights of co-ops, and that
CMHCs new role somehow safeguards co-ops.

The Harris government has proven that it cannot be trusted to
respect co-op contracts or the rights of co-op members. The
Harris government has already broken contracts with co-ops, not
once, but twice. Co-ops have twice taken the Harris government to
court. The CMHC has stood by and done nothing to help when the
province violated the contracts of co-ops built under the
federal/provincial program.

The federal government badly wants the provinces to take over
housing. As part of selling the transfer deal to provinces, they
have shown provinces where the weaknesses are in existing co-op
contracts, and pointed out areas where provinces will have
"flexibility" to make changes after the transfer.

Questions &
Answers on the new Federal/Provincial Social Housing Agreement

The
federal government has offered to transfer the management of
federal social housing resources to provincial and territorial
housing authorities. Canada Mortgage and Housing Corporation
(CMHC) has now signed agreements with Saskatchewan and New
Brunswick and these are expected to serve as templates for
agreements with the other provinces and territories. The new
social housing agreement addresses the management of all
federally-funded social housing, except some native housing.

Q.In
good faith, federal MPs assured co-op members that co-ops'
existing contracts with CMHC would be protected under the new
Social Housing Agreement. Are they?

A.No.While
the Agreement addresses the issues and concerns of the two levels
of government who sat down at the table, it fails to offer
legally-binding protection for the other parties to these
contracts, i.e. the co-ops that own and manage the actual
housing. That's the opinion of noted constitutional expert
Patrick J. Monahan, Professor of Law at Osgoode Hall Law School
in Ontario. Prof. Monahan examined the Saskatchewan Agreement
recently and said that, in his considered opinion:

".....nothing
in the Agreement requires [Saskatchewan Housing
Corporation] to 'respect' existing agreements or
to obtain the consent of parties to operating
agreements before amending or replacing those
agreements."

and
that:

"....[Saskatchewan
Housing Corporation] is not required by the
Agreement to manage and administer federal
co-operative housing programs in Saskatchewan in
accordance with existing project operating
agreements."

The deal
effectively gives the provinces complete control over the
programs.

Q.Does
that mean that, despite what CMHC is telling MPs and the public,
the provinces can unilaterally alter the
operating agreements between co-operatives and the government?

A. Yes.Prof.
Monahan found that:

"....in
the event that the Saskatchewan legislature were
to enact legislation overriding or amending the
terms of such project operating agreements,
neither [Saskatchewan Housing Corporation] nor
the government of Saskatchewan would be in breach
of their obligations under the [Social Housing]
Agreement."

Q.Were
all parties to co-op operating agreements permitted to sit at the
negotiating table as these deals were made, or were they at least
consulted in sidebar discussions?

A.No. The
negotiating took place -and continues to take place- behind
closed doors, excluding a significant group of stakeholders: the
women and men who live in, own, and manage this housing. These
groups are the primary partners in the successful delivery of
these federal programs, but they have not been consulted.

Q. CMHC
says it is guaranteeing stable funding for social housing at
current levels. Doesn't that mean security for existing projects?

A.No.The security
is illusory. The $1.9 billion the federal government currently
spends on social housing programs is "guaranteed", but
the dollars are not tied to existing programs and projects. And
the agreements with the provinces promise a steadily shrinking
federal contribution. As existing programs and projects reach the
end of their funding cycle, federal funding will cease and there
are no assurances that anyone else will step in. The agreements
reveal a slow but definitive withdrawal of federal financial
support for Canadians with housing needs.

Q.
If the new Social Housing Agreement sets the stage for the steady
withdrawal of federal financial support for affordable housing,
does it require the provinces to do anything to meet the housing
needs of low and moderate income Canadians?

A. No.There
is nothing in the Agreement that directs the provinces to assume
that responsibility or, for that matter, that obliges them to
continue spending the money they contribute now under shared-cost
housing programs. In fact, the Agreement gives the provinces and
territories an incentive to reduce the number of social housing
units in their jurisdiction. Clause 7(e) of the Agreement says,
"....for greater certainty the removal of Housing from the
Portfolio [of programs covered by the Agreement] (whether by
disposition, destruction, no longer being within a program in the
Portfolio or otherwise) will not entail any reduction of the
total amounts of CMHC Funding...."

The Agreement only requires that CMHC funding be spent on
programs that meet the broad principle of funding housing for
low-income people. So a province is free to take the federal
money that is no longer needed to support a discontinued project
or program and substitute it for provincial money on other social
housing projects.

Q.
Will the Agreement affect the character and quality of
federally-funded co-ops?

A. Yes. There
are concerns among co-operatives that the Agreement will lead to
the erosion of their autonomy as property owners, especially when
it comes to day-to-day management decisions. The failure to
protect the existing contractual rights of co-operatives makes
these concerns very real; what the provinces view as
"flexibility" in the Agreement, co-operative members
see as an invitation to intrude. Any careful reading of the
history of co-operative housing will show that the greater the
degree of government intrusion, the less efficiently co-ops
operate.

Q.
Minister Marleau has vowed not to enter into the new Social
Housing Agreement with any province that is unable to convince
her that it will respect the national principles the Agreement
sets out. Doesn't this ensure protection for co-ops?

A. No. The
Agreement requires provinces to respect only two broad
principles: CMHC funds must be spent on housing; and that housing
must be for low-income people. The federal government appears to
be turning its back on principles carefully developed and
enunciated throughout nearly three decades of building social
housing. Two proven principles that account for the success of
co-operative housing in Canada appear nowhere in the agreement:
that it be community-led, not government-run, and that it house a
mix of low and moderate income families and individuals.

And the Agreement will not stop a province that wants to from
altering co-op programs. Indeed, the Agreement explicitly permits
this.

Q.
But won't downloading social housing to the provinces reduce
overlap and duplication of government services?

A. Yes and no.Consolidating the control of shared-cost programs, such as
public housing, with one level of government will reduce program
administration costs. But very few co-op-erative housing units
receiving federal support were initiated under these shared-cost
programs. The remainder are unilaterally federally-funded and the
transfer of management of these programs to twelve provinces and
territories will increase wasteful duplication and
government involvement, not lessen it. Provinces taking over
these co-operative programs will have to add to their
bureaucracies and invest time in learning to administer programs
that CMHC will continue to oversee. In Ontario, the province
intends to download those programs to yet a third level of
government ůmunicipalities. So in that province three levels of
government would be involved.

Q.
Will turning over social housing programs to all the provinces
and territories contribute to national unity?

A. No, it
will not. At the community level the effect on national unity
will be imperceptible to the majority of Canadians. And the
transfer threatens to fragment the co-operative housing system, a
Canada-wide system that features local delivery of an essential
service-decent, affordable housing in resident-controlled
communities. You don't shore up unity efforts by tearing down
national programs that work and work well.

Q.
Are there alternatives that would meet the federal government's
stated goals of efficient restructuring and the establishment of
a strong accountability framework?

A. Yes, there
are. Few Canadians believe that moving services from one level of
government to another is the way to achieve efficiencies.
Governments worldwide are moving, not towards more government
involvement, but less. Many are turning to accountable industry
self-management models -and that is just what the co-operative
housing sector has proposed to the Hon. Diane Marleau. The
Co-op-erative Housing Federation of Canada (CHF Canada) has
proposed setting up a non-profit, non-governmental facility to
administer the federal co-operative housing programs.

The proposed facility will reduce program administration costs
and lead to more efficient use of federal subsidies, while
adhering to the goals and principles of current programs and
operating within a strict accountability framework. As important,
the CHF Canada proposal will ensure the continuing success of a
housing system that many thousands of people in this country have
worked very hard to build-an effective, unifying system, working
in every province and territory.

Q.
Has there been any evaluation of the CHF Canada proposal to
administer the federal programs through an independent,
non-governmental facility?

A. Yes, there
has.In January-February 1996, an independent study
commissioned and jointly funded by CMHC and CHF Canada examined
the co-op-erative sector's proposal and compared it to CMHC's
current operation with improvements suggested by CMHC. The
consultant found that, compared to CMHC's approach, the CHF
Canada proposal would generate savings for government in program
administration costs and assist co-operatives in increasing the
effectiveness of their operations. When a co-op saves money in
its operations, that means more money to house people in need,
either in that co-op or through other housing programs.

Q.
Isn't the CHF Canada proposal all about empire building and
saving jobs at the federation?

A. No.Just
the opposite, in fact. The CHF Canada proposal for a national
non-governmental agency to administer the programs is a more
efficient approach. If program management is transferred to
twelve different provincial and territorial governments, CHF
Canada will have to expand and set up a larger bureaucracy to
deal with those twelve different governments. CHF Canada is a
co-operative of co-operatives and will restructure itself as
required to meet the needs of its members, not its employees.

Q.But won't the
non-governmental agency CHF Canada is proposing be in a conflict
of interest?

A. No. The
proposal calls for an arms-length organization with an entirely
separate structure and a separate board of directors. The agency
will be accountable not only to its independent board but to the
federal government through the contract it enters into to
administer the program. The co-operative sector has at least as
strong an interest in ensuring the proper administration of co-op
housing programs and the continuing success of every
co-op-erative community as does government.

It's
important to note that the CHF Canada proposal is a national
response to a national need for the business-like management of
social programs. The federal government's current "all or
nothing" negotiating stance means that provinces and
territories interested in taking on any part of the federal
social housing portfolio must take it all; they are not free to
decline the co-op programs. The co-op housing sector is caught in
a true Catch 22 situation: the provinces say the federal
government won't exclude co-ops from the deal; and the federal
government says go talk to the provinces. Several provinces have
told CHF Canada that taking over responsibility for the co-op
programs is not necessary for the achievement of provincial
objectives. They await some indication directly from the federal
government that it would prefer to keep co-ops out of the deal.

Q.
Aren't the federally-proposed Social Housing Agreements fixable?

A. Not as they
currently stand. But reaching an agreement with the provinces
to take the co-operative housing units off the table and entering
into serious discussions with CHF Canada on its proposal would be
an excellent start.